CHARLESTON, W.Va. — Members of the House of Delegates Finance Committee were reminded again Friday that $105 million in a year-old rainy day fund for health insurance costs for state workers could be depleted by budget year 2022 unless more money is allocated to the fund.
State Public Employees Insurance Agency (PEIA) Executive Director Ted Cheatham was before the committee for a budget presentation. He explained the different accounts the agency is using to handle growing health care costs while at the same time not increasing premiums.
Cheatham said the PEIA Reserve Fund has a balance of $120 million. He said there are no plans to touch that in order to keep the required percentage of back-up funds. He said the agency’s Premium Stabilization Reserve Fund, made up of money saved in operations and earned in investments has a balance of close to $60 million and then there’s the new PEIA Rainy Day Fund established by Gov. Jim Justice and lawmakers last year to satisfy teachers and other state workers concerned about premium increases.
Cheatham said Friday the plan is to spent most all of the Premium Stabilization Reserve Fund in next year’s budget and about a third of the rainy day fund.
“We think we may need $34 million additional out of the rainy day fund for PEIA,” Cheatham said.
Cheatham said the rainy day fund money will not come as an 80/20 match. That means state workers will not have to pay more for health insurance.
Costs go up for PEIA between $50 million and $80 million so if there’s going to be no premium increase, the money has to be found somewhere. Cheatham said what’s left in the PEIA Rainy Day Fund after next budget year should be able to cover the increasing costs in the budget for fiscal year 2022.
“The way we’re forecasted in our budget, for 2022, we’re looking to need another $78 million from the PEIA Rainy Day Fund,” Cheatham said Friday.
He also told lawmakers the numbers need from the rainy day fund could go down if the state has another good claims year. The level of the annual health care cost increase has been showing a decline in recent years because there are fewer state workers.
According to the law setting up the rainy day fund, the governor would have to authorize money from the fund to be transferred to PEIA.